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A Conventional Mortgage is a Mortgage that isn't guaranteed or insured by a government agency. Most commonly they are fixed rate and fixed term Mortgages
The Government agencies that do not insure or guarantee Conventional Loans are the Federal Housing Administration (FHA), the Farmers Home Administration (FmHA) and the Department of Veterans Affairs (VA) The FHA is a part of the Department of Housing and Urban Development and insures residential mortgage loans made by private lenders. The FmHA provides financing to farmers and other qualified borrowers who may have trouble getting loans. VA loans are for veterans or members of the military and can have a lower down payment.
Another way of understanding Conventional Mortgage loans is that they will adhere to Fannie Mae guidelines. Fannie Mae, or Federal National Mortgage Association, is a government created and backed corporation that buys and sells these Conventional Mortgages. It sets all of the requirements for these Mortgage Loans and their borrowers
A Conventional Mortgage is typically a 30-year fixed rate loan and also require at least a 20 percent down payment without the need for PMI or Private Mortgage Insurance.
Conventional mortgages usually have better interest rates than non-conventional mortgages.